1997 (11) TMI 486 - AT - Central Excise

Summary

Issues:
Demand of duty on Silver Oxide Zinc Batteries supplied to Defence at a lower price compared to another buyer, computation of assessable value based on transaction value, consideration of price of silver, limitation aspect regarding duty payment, suppression of facts, remand for further examination.

Analysis:
1. The appeal involved a dispute over the demand of duty on Silver Oxide Zinc Batteries supplied to the Defence at a lower price compared to another buyer. The appellants argued that the transaction value should be considered for assessing duty, citing Section 4 provisions. They contended that the price charged to the Defence was the correct duty paid as it satisfied all parameters of Section 4(1)(a).

2. The appellant's advocate emphasized that there was no additional consideration for the sale to the Defence, referring to relevant legal precedents to support their argument. They argued that Section 4 does not require computation of cost when the actual price is available, and the duty was correctly paid based on the transaction value.

3. The issue of adopting the price of silver at Rs. 2,500/- per kg was raised, with reference to a Supreme Court decision. The appellant argued that there was a two-way sale involving the life expired batteries, and the assessable value was determined based on the material's value.

4. Regarding the limitation aspect, the appellant claimed that they were clearing goods based on invoice value, and the non-supply of contracts specifying the silver value should not be considered as suppression of facts to evade duty payment.

5. The department argued that the lower price charged to the Defence was due to the supply of life expired batteries, impacting the true cost of the material. They contended that the price should reflect the actual value of the material and not a notional value based on a special arrangement.

6. The Tribunal observed that the price worked out by the appellants based on the lower silver price was not reflective of the true value, as it was a notional value determined by the Defence. The assessable value should be based on open market conditions, not on a special arrangement.

7. Considering the limitation aspect, the Tribunal found that further examination was needed to determine if there was suppression of facts with the intention to evade duty payment. The lower authority's order was remanded for a detailed consideration of all relevant factors and an opportunity for the appellants to be heard.

8. The appeal was decided in favor of remanding the matter for a deeper examination of the limitation aspect, ensuring a fair opportunity for the appellants to present their case and address all relevant issues comprehensively.